Government must tackle inflation: ISME and SFA

Both the Irish Small & Medium Enterprises Association (ISME) and the Small Firms Association (SFA) have said that the Government must ensure that next week’s Budget tackles inflation figures.

Figures released this morning showed that inflation remained unchanged at 4.3% for the past month.

ISME chief executive Mark Fielding said: "The latest inflation figures are disappointing coming as they do after reductions in the previous two months.

"With the downward trend coming to a halt, a fresh impetus needs to be injected into the economy to ensure that costs are addressed and future inflation rates are reduced.

"The Government was very quick off the mark to bail out the bankers, but has shown no willingness to address the cost environment, which has devastated the rest of the economy.

"The cost of doing business is a more serious threat to the economy than any banking crisis and a concerted effort is now required to address this vital issue, once and for all."

ISME is advocating a 12-month freeze on all government and local charges, no new stealth taxes and the setting up of a competition council.

Meanwhile, the SFA believes that the standard rate of tax should be reduced by 2% to 19%, that wage rates should not exceed competitor economies and that a price freeze on publicly administered services should be imposed.

"Overall, in Budget 2009, the minister must be cognisant that the control of inflationary pressures is a prerequisite to restoring the competitiveness of the Irish economy," said SFA assistant director Avine Nally.

"The SFA is calling on Government to ensure that there are certainly no indirect tax increases, by way of VAT or excise duties in Budget 2009, and to examine the potential for actual decreases in indirect taxation."